What is the fee for Cordova franchisees with 1 territory in year 3?
Cordova Franchise · 2025 FDDAnswer from 2025 FDD Document
e with the following schedule:
| Total | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Years 7 to 10 |
|---|---|---|---|---|---|---|---|
| Territories | |||||||
| 1 | $5,000 | $7,500 | $12,500 | $20,000 |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Cordova's 2025 Franchise Disclosure Document, franchisees with one territory will have a minimum quarterly royalty fee requirement of $12,500 in their third year of operation. This fee is part of a tiered structure that increases over the first six years, then stabilizes from years 7 to 10.
This minimum quarterly royalty fee requirement means that even if a Cordova franchisee's gross sales do not reach a level that would normally generate a 10% royalty payment of $12,500 in a given quarter, they are still obligated to pay that amount. If the 10% royalty on gross sales is less than $12,500, the franchisee must pay the difference as a supplemental royalty fee.
For a prospective Cordova franchisee, this represents a significant financial obligation, especially in the early years of operation. It's crucial to factor this minimum quarterly royalty fee requirement into their financial projections and ensure they have sufficient capital to meet this obligation, even if their business is initially slow to generate revenue. This requirement could impact profitability, especially if sales are lower than anticipated during the initial years.